Government launches ‘BHIM-Aadhaar Pay’ app to boost digitization wave

In a bid to further boost the digitization wave in the country, the government has launched BHIM-Aadhaar Pay, which allows payment through thumb impression.

The new app links the Bharat Interface for Money (BHIM) mobile application with biometric platform Aadhaar, which will “pave the way for making digital payments by using the Aadhaar platform,” the government said in a statement.

Developed by National Payments Corporation of India (NPCI), any citizen without access to smartphones, the internet, debit or credit cards will now be able to transact digitally through the BHIM-Aadhaar platform. “This app can work even on a Rs 1,000-1,500 phone; you don’t need a smartphone. If you don’t have a phone you can use your thumb,” PM Narendra Modi said while launching the app.

The app is required to be downloaded only by those who will receive the payment, such as merchants or business persons. Once the app is installed, dealers can easily receive payments from a customer through their 12-digit Unique Aadhaar Number. The payment is processed from the customer’ Aadhaar enabled Bank A/C, i.e., AEBA.

To verify the payment, the customer would require scanning his/her fingerprint that will be compared against the Aadhaar card data, and the payment will be completed.

On the security front, the Interface uses two main platforms, Aadhaar Payment Bridge (APB) as a repository between banks and Aadhaar Enabled Payment System (AEPS) to ensure that all the details provided are authentic through an internal process as described by NITI Aayog.

The app also dismisses the need to pay Merchant Discount Rate (MDR) to receive transactions. All the banks charge MDR for providing their debit or credit card services. However, now a merchant validating payments through the BHIM-Aadhar app no longer needs to pay MDR to banks.

The government said 27 major banks have already tied up with 7.15 lakh merchants for accepting payments using BHIM-Aadhaar Pay, and all public sector banks have been instructed to go live with Aadhaar Pay.